This term paper shall give an overview of different options to enter an emerging market and indicate a company about identifying the most promising market entry strategy. Which factors determine the market entry strategy for an emerging market?
To answer these questions company and market specific factors in terms of emerging markets will be considered. E.g. company size, market potential or social and cultural differences might eliminate strategies already before. But are the chances opening up by entering an emerging market predominant and worth the risk?
Following the introduction, the second chapter provides definitions of emerging markets and developing countries. Furthermore it illustrates the characteristics of emerging markets on the basis of the BRIC countries. In Chapter three factors affecting the decision for a market entry strategy are displayed. Moreover this chapter includes chances and risks of entering emerging markets. Chapter four explains different market entry strategies which are then critically analysed with regard to the previous findings in chapter five. On this basis chapter six provides the conclusion including answers to the afore-mentioned questions.
Table of Contents
1 Introduction
1.1 Objective of the term paper
1.2 Course of investigation
2 Definition and characterisation of emerging markets
3 Factors affecting the market entry strategy
3.1 Internal factors
3.2 External factors
3.3 Chances and risks of entering emerging markets
4 Market entry strategies
4.1 Export
4.2 Contractual
4.3 Investment
5 Critical analysis of market entry strategies for emerging markets
6 Conclusion
Objectives and Topics
This term paper provides a comprehensive overview of various market entry options for companies looking to expand into emerging markets, aiming to identify the most promising strategies by evaluating company-specific and market-specific factors.
- Analysis of defining characteristics of emerging markets and the BRIC countries.
- Evaluation of internal and external factors influencing the choice of entry strategy.
- Identification of significant opportunities and risks associated with emerging economies.
- Classification and critical examination of export, contractual, and investment-based entry strategies.
- Development of decision-making criteria for companies to ensure successful long-term market entry.
Excerpt from the Book
3.1 Internal factors
Internal factors are company related factors and can be influenced. Control is important for the company when entering a foreign market because initially it is unknown. One option to ensure control is to set up hundred percent owned subsidiaries to enable the company to act, work and decide by itself in the new market. In contrast to hat the use of intermediate undertakings, like distributors, result in a low level of control.
On the other hand flexibility is important to adapt changes of the market conditions. It serves as an indicator whether the company is able to recognize changes e.g. in the buying behaviour and if it is able to respond to them. This is assured through the know how to establish new structures internally, the ability to assign relevant resources to the changes and diversification of products if necessary. If this were the case flexibility is a competitive advantage for the corporation.
Summary of Chapters
1 Introduction: Introduces the topic of internationalization through globalization and outlines the paper's objective to identify suitable market entry strategies for emerging economies.
2 Definition and characterisation of emerging markets: Defines emerging markets based on economic indicators and illustrates these characteristics using the BRIC nations.
3 Factors affecting the market entry strategy: Discusses the internal and external variables, as well as the inherent risks and chances, that determine a company's internationalization strategy.
4 Market entry strategies: Categorizes entry modes into export, contractual, and investment strategies, detailing the mechanics of each.
5 Critical analysis of market entry strategies for emerging markets: Examines the advantages and disadvantages of different entry modes in the context of emerging markets to help companies select the most appropriate approach.
6 Conclusion: Summarizes the findings and emphasizes that the choice of strategy is highly dependent on company-specific resources and the specific characteristics of the target market.
Keywords
Emerging Markets, Market Entry Strategy, Globalisation, BRIC, Export, Contractual Strategy, Investment, Joint Venture, Greenfield Investment, Risk Management, Market Potential, International Management, Business Expansion, Trade Barriers, Corporate Control
Frequently Asked Questions
What is the fundamental focus of this paper?
This paper explores the strategic options available to companies seeking to enter emerging markets and provides a critical analysis of these approaches.
What are the central thematic fields covered?
The core themes include the definition of emerging markets, the influence of internal and external business factors on internationalization, and the evaluation of different entry modes.
What is the primary goal of the investigation?
The primary goal is to guide companies in identifying the most promising and risk-appropriate market entry strategy for emerging economies.
Which scientific methodology is utilized?
The work employs a qualitative analytical approach, reviewing existing academic literature and models concerning international business, market entry modes, and characteristics of emerging economies.
What is covered in the main body of the work?
The main body examines factors such as control, flexibility, and trade barriers, and categorizes entry strategies into export, contractual, and investment models, concluding with a critical analysis of their applicability.
Which keywords characterize the work?
The key concepts include Market Entry Strategy, Emerging Markets, BRIC, Risk Management, and various entry modes like Joint Ventures and Exports.
Why is the concept of "control" highlighted in the paper?
Control is identified as a critical factor because emerging markets are often unknown and volatile, requiring companies to decide between high-control strategies like subsidiaries or low-control strategies like intermediaries.
How does the paper differentiate between Greenfield investment and M&A?
Greenfield investment is described as an internal growth strategy establishing a new subsidiary, whereas M&A is an external growth strategy involving the purchase of existing foreign firms.
What role do BRIC countries play in the analysis?
The BRIC countries serve as paradigmatic examples to illustrate the characteristics and high growth potential of emerging markets throughout the study.
- Quote paper
- B.A. Johann Kristoph Kaup (Author), 2016, A discussion of market entry strategies in emerging markets, Munich, GRIN Verlag, https://www.grin.com/document/429834
